By Sophie Ryan, iSelect spokesperson
With the end of the financial year approaching, you may be thinking about your next tax return and the welcome boost it could give your bank account during these tough financial times. But have you ever thought about private health insurance around this time of year?
It might surprise you, but June is one of the busiest months of the year for private health insurance with Aussies either reviewing their current policy or signing up for a new one.
Why? There are a few reasons why it’s a good idea to think about private health insurance this month. So, let’s break it down as we detail the five ways Aussie households could save this EOFY.
1. Medicare Levy Surcharge (MLS)
If you don’t have private hospital cover, keep in mind that you may need to pay an extra tax via the MLS in the next financial year. This generally applies to singles with a taxable income over $90,000 or couples and families with a combined taxable income of over $180,000[1]. So, if you’re earning above that threshold and don’t have appropriate hospital cover, this June is a great time to consider taking it out.
2. Lifetime Health Cover (LHC) loading
We know if you’re a younger Aussie it may be hard to justify paying for private hospital cover, but if you don’t have it by July 1 following your 31st birthday, you’ll pay more for your hospital premiums if you do decide to take it out down the track due to Lifetime Health Cover (LHC) loading[2].
If you celebrated the big 3-1 during the past year, now could be the time to think about taking out hospital cover to avoid paying higher premiums later in life.
3. Health Insurance Premiums in 2022
If you’re a policyholder, your health insurance premium may have just gone up on April 1. If not, it may increase later this year after some health funds deferred their annual premium hikes due to the COVID-19 pandemic.
If you’re unsure about your premium, use the EOFY as your cue to find out if it’s just increased or when it will in the second half of 2022, and then think about if you’re still covered for what you need and whether you could be paying for things you don’t.
4. Think About Your Winter Energy Usage
The colder months are here, so now is a great time to consider your energy usage and look for ways you could cut down. Before you turn that heater on, think about pulling on a jumper instead or adding a few layers of clothing first.
Did you know that every extra degree on your heater can add up to 10% on your bill[3]? It’s a good idea to review your energy plan now and compare it to other options to see if you can save money.
5. Check Your Internet Needs
The chilly weather may also have you and the family spending more time indoors. And this could lead to more internet data usage. How? Think about how many more shows or movies you might be bingeing this winter. One way you could save this EOFY is checking your broadband plan and considering whether it still suits your needs.
There you have it. Five things to consider this EOFY that could put some extra money back in your pocket. We know a few items on this checklist may be confusing for some, especially when it comes to private health insurance.
So if you’re feeling unsure, a comparison service such as iSelect* has trained consultants who can try to help you understand how private health relates to MLS and LHC and compare your current policy against other options from iSelect’s range of policies and providers.
Disclaimer:
*iSelect does not compare all health insurance providers or policies in the market. The availability of policies will change from time to time. Not all policies available from its providers are compared by iSelect and due to commercial arrangements, your stated needs and circumstances, not all policies compared by iSelect will be available to all customers. Some policies and special offers are available only from iSelect’s contact centre or website. To view iSelect range of providers, visit: www.iselect.com.au/partners
[1] Source: https://www.privatehealth.gov.au/health_insurance/surcharges_incentives/medicare_levy.htm
[2]Source: https://www.privatehealth.gov.au/health_insurance/surcharges_incentives/lifetime_health_cover.htm
[3] Source: https://www.energy.gov.au/households/household-guides/seasonal-advice/winter
